Italian yields drop to 8-yr low
Italian government bonds rose with those of Spain and Portugal before current mayor of Florence Matteo Renzi meets president Napolitano to be sworn in as new PM.
Matteo Renzi, the mayor of Florence, is expected to be sworn in as prime minister. Renzi ousted former PM Letta and stepped forward to take over Europe’s biggest debtor after winning leadership of the Democratic Party in December, having said that Letta’s 10-month-old government failed to meet its targets.
At the news of a meeting between Renzi and president Giorgio Napolitano (pictured) in view to form a new government, Italian bond yields have fallen close to an 8-yr low this morning following a decision to lift its credit outlook by the rating agency Moody’s.
The BTp-Bund spread also came down to around 190 bps, at 10-year yield on 3.64%, touching its lowest point since February 2006.
Italy’s credit rating was raised to stable from negative by Moody’s after markets closed at the end of last week.